Determine the maximum exchange ratio based on an EPS valuation that Links Ltd$.$ can offer without diluting its EPS, taking synergistic benefits into account.

a$.$

$0\mathrm{.}10$

b$.$

$0\mathrm{.}20$

c$.$

$0\mathrm{.}70$

d$.$

$0\mathrm{.}80$

Question $7$

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Marked out of $3\mathrm{.}00$

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Calculate the exchange ratio based on market values.

a$.$

$0\mathrm{.}10$

b$.$

$0\mathrm{.}12$

c$.$

$0\mathrm{.}15$

d$.$

$0\mathrm{.}20$

Question $8$

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Marked out of $4\mathrm{.}00$

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Consider the same above case but take the following assumptions into account to calculate the market premium if Links makes an offer in line with the maximum exchange ratio, as determined from earnings and synergistic benefits, based on the information in the case. $($Ie$.,$ replace these variables in the case with the below assumed values.$)$

ASSUME the following:

$$ The market price of the acquirers$($Links$)$ shares is: R$10$

$$ The market price of the target$$s $($Smartmove$)$ shares is: R$1$

$$ Smartmove $($target$)$ has EPS of R$0\mathrm{.}10$

a$.$

$100\%$

b$.$

$200\%$

c$.$

$400\%$

d$.$

$500\%$